Will bitcoin be a trigger for breakthrough in solar energy or a new computing material?

posted by Ravi Arora January 13, 2018

In 2018, the predicted technology trends like IoT, augmented/virtual reality, video streaming, social networking, mini-drones, electric vehicles, block-chain, robotics and artificial intelligence point to one more trend – explosion in demand for electric energy. Instead of thinking  about a new-year resolution, I spent the long weekend during the new-year to learn about the bitcoin economy (cryptocurrency) – A subject that is drawing a lot of attention and speculation. It was an amazing exploration, which convinced me to add one more future trend – explained at the end of this article.

Increasing demand for electricity

There are many places in the developing countries where there is no infrastructure for supply of electricity. Two different reports suggest that approximately 25 Crore (250 million) people in India do not have access to electricity. At a global level this number would be approximately 100 Crore (1 billion). The government of all these countries are gradually electrifying these areas and as more and more people get access to electricity the demand for electricity will increase. In the developed parts, the energy consumption is increasing spirally due to increasing consumption of digital services. A few major are explained below:

Bitcoin (Computing)

We know bitcoin is based on blockchain, which has already been predicted to be one of the future technologies that would affect many industries. Bitcoin mining is a term that is used for bitcoin network, which verifies the transactions made by using bitcoins. How many of us know that bitcoin mining is very computational heavy? Let me give some data – One of the recent reports indicated that bitcoin mining consumes 30-36 TWh of electric power globally! To give you some sense of this number the total electric power consumed by Ireland is around 25 TWh. Countries like Bulgaria, Qatar and Hungary have similar levels of electricity consumption. Every bitcoin transaction uses almost 300 KWh of electricity – enough to boil around 36,000 kettles full of water. The bitcoin network today is capable of handling only 3 transactions every second. Compare this with VISA which processes more than 2000 transactions per second! This clearly indicates that for crypto-currency to become a reality, it must reduce its electric footprint multiple times (something that ‘Proof of Stake’ algorithm has achieved in the more recently launched crypto-currencies like Ether and Ripple as compared to ‘Proof of Work’ algorithm which is used in bitcoin. Some experts believe that ‘Proof of stake’ is not a pure form of blockchain).

Video streaming

As per the estimates, the total Electricity consumed by the world is about 25,000 TWh. India consumes about 1500 TWh. A similar amount of electricity (about 1500 TWh) is consumed in all types of computation and related storage of the world. As per one report, laptops and desktops by themselves consume less power, but watching an hour of a video every week, consumes more power annually in the networks that two refrigerators would consume in a year!

IoT and Data-centers

Increasing penetration of smart phones, faster networks (4G and beyond), increasing use of IoT, blockchain means that there would be more storage and more flow of data indicating that there would be a need for more power in Data Centers, networks and devices. More than a billion people and a trillion devices are expected to get connected in near future. Unfortunately, the improvements in hardware technologies to increase the power efficiency has slowed down and the improvements are far slower than the rate of increase in demand for data (storage, computation, network and consumption devices like phone, TV etc.) At the end of 2015, data centers consumed about 3 per cent of the global electricity. That gives it the same carbon footprint as the airline industry.

Another report suggests that the amount of energy used by data centers is doubling every four years – despite the innovations in hardware. The report suggests that Japan’s data centers would consume its entire electricity supply by 2030 if growth continues at today’s rate. The demand for data centers will exponentially grow as more people will get hooked on to smartphones shopping and consuming more pictures and videos. More devices will get connected to internet generating data every second (Jevons paradox – the cheaper/easier it becomes to consume, greater is the consumption). We are now in a world where more than 4 exabytes of data is being generated every day (or 16 zettabytes in a year).

Half life of data is infinite

Forrester Research estimates that as much as 60 to 73% of the data being collected is never successfully used for any strategic purpose. Usually accumulation is an indicator of richness but is it true for data (Is it the new oil?) Does data make us rich or it could make us poor? What is the length of time the data is kept these days – “forever” Data is gold for the company that stores it (data-centers) but is an expense for the company that owns it. I think the time is coming when the cost of holding data and computing data should appear as a separate line item on profit-loss statements and therefore in the book-keeping. This could trigger a beginning of companies making policies and informed decision about data defecation or sequestration.

Solar is the only solution

Where will this energy come from?  – It must be solar: The potential of solar power is huge. The total energy that we receive from the sun in one hour is the total electricity the world consumed in 2017.The state of Texas in the US alone, if covered with solar power generation, can generate 50-100 times the power needed by the whole world! The exponential increase in demand of electricity due to digital world cannot be met by fossil fuel-based power generation. Semiconductor Industry Association (SIA) calculated that computing will not be sustainable by 2040, when the energy required for computing will exceed the estimated world’s energy production. There is a high chance that we are the tipping point of harnessing the solar power.


The above discussion indicates that we could see a breakthrough in either or combination of the following:

  • Competitive solar power generation and storage leading to exponential rise in solar power generation.
  • Breakthrough in hardware for computing and storing – which would consume far less energy.
  • Clear policy in companies about Data defecation or sequestration.

Human behaviour is most difficult to change and hence it is less likely that CIOs would adopt a data defecation or sequestration policy in near future although I do believe it would emerge as a topic for discussion after a decade. Therefore, my bet for near future is on the first two points – tipping point for cheaper solar energy (and battery) or discovery of a new material for computation.